CLSA analyst Brian Johnson has suggested Westpac could be in the market for up to $5bn of equity when it announces its annual result in November. “Notwithstanding substantial capital raisings/business divestments by the Australian banks, we believe real CET1 (common equity tier one, the highest form of capital) ratios still look light with global bank capital intensity continuing to rise,” Mr Johnson said.
Westpac is believed to be sitting at the bottom of the CET1 capital holdings of the big four banks but has taken the opportunity at previous results announcements to alert the market to its intentions with regards to capital management.
In May this year Westpac raised $2bn of CET1 via its dividend reinvestment plan and August it raised $1.25bn of additional Tier 1 capital through a hybrid issue.